Q1 in the Tiburon real estate market was a tale of two different property-types; one booming and highly desirable, the other seems to have peaked.

The condominium market had seen sky-high attention throughout the 2021, and values continually grew throughout the end of the year and holiday season. That demand seems to have tailed off, with only 9 sales and a $150k decrease in the average sale price from $1.5M down to $1.35M.

The median home market is absolutely on fire. The median value eclipsed $4M for the first time in recorded history, and demand really hasn't seemed to fall off. Supply continues to be dwarfed by demand, as most homeowners know if they sell to capitalize on the gain, they'll be hard pressed to buy in any other median markets in the general area to actually realize the gain. Only people leaving town/off-loading second homes are in a position to directly benefit for the market growth.

The luxury market is proving its in a league of its own in Marin, The Bay Area, and even the State. The average value of a home in the 'luxury market' ($1M above the current median) has jumped $2.7M since 2019, or roughly 40%. Few markets in history have achieved such growth in such a short period of time.

The Condominium Market

The condominium market seems to be recoiling after an explosive 2021 campaign, with average prices falling and days on market climbing. After seeing continual all-time-high’s throughout 2021, we all predicted more of the same in '22.

Q1 showed that buyer interest may have already peaked, and competition between buyers isn't driving the same values as it was last year. With interest rates on the rise, I actually think there could be a second wind for the Tiburon condominium market. As buying power in the market at the median price point for single family homes continues to decline (rising rates = declining buying power), I think we’ll see buyers who are seeing themselves out priced in the housing market shift their attention to the best-available condominium market, and west-facing Tiburon properties should continue to reign supreme as best-available in Marin.

The Median Market

For the purposes of defining the line between the median market & the luxury market, $1,000,000 above or below the median at the time of this report is considered the market for a median home, whereas anything $1M above or greater tends to correlate better to the luxury market.

The median single family home market is on a rampage. Values keep climbing, days on market keep falling. Buyer demand is literally insatiable. The median home value jumped over $400k in Q1 compared to '21 homes values.

With inflation becoming an ever-present conversation around investment vehicles, real estate as an asset class seems to be more favorable than holding cash + other asset classes. With supply for homes so restricted here, it’s hard to see any drop off in demand, irrelevant of macro-economics.

The Luxury Market

The Tiburon luxury market is defining a new growth standard for luxury markets globally. The attention this market subset has received since the early days of the pandemic is nothing short of incredible, almost as if sleepy Tiburon was an enigma prior to The Great SF Exodus, now seems to be a highly desirable option. The average price of a home in the luxury market here is $6,988,000.

In 2019, for example, when the median home value was $2,963,000, the same formula used to define median vs. luxury markets defines the luxury market average home value at that time to have been $4,220,000, meaning the luxury market is up almost 40% since the pandemic began, or $2,760,000.

Projecting Ahead To Next Month/Quarter

It's hard to see a slow down on the horizon for this undersupplied single family home market, whereas the condominium market may have seen its short to medium term peak in 2021. With the median housing market racing above $4M, I wouldn't be surprised if the buyers continually getting beaten out in the single family market turn to the condominium market, and seek luxury condominiums in A+ locations; like Tiburon.

The single family home market Bay Area wide is exploding, continually pushing 20 to 30% above previously recorded highs, and in some cases more than 40%! That is insane. Tiburon is no different, the current buyer demand for our peninsula is something we really haven't seen before.

There are certain events on the horizon that have the potential to decrease the speed of growth; rate hikes, or WW3, for example, but given the modern real estate asset (ability to short term lease, find nightly tenants at sky-high rates, etc) is so much more functional than bubbles-past, it's hard to define if it will slow down in 2022. Expect more of the same.